Forecast for the week October 23rd through October 27th:
This week quotes are likely to drop for two reasons. Firstly, we are observing strong growth in stock markets, for this reason gold is traditionally under pressure. American stock indexes are breaking records despite of the fact that the earnings season has just started and there's still many positive reports to go. Secondly, USDX is strengthening, which is also negative for gold. CFTC reports indicate gold flat: over the last two weeks speculators cannot decide on trend direction and number of long net positions hardly changes. For this reason, during this week moderate gold drop may be expected. Trading signals: Sell 1285/1294 and take profit 1275.
Go long counting on the testing of two-year high (58,83). The fundamental situation for oil is positive now. First of all, oil inventories and oil output in USA have been reducing for four weeks now. On Friday Baker Hughes reported decrease in number of oil rigs in USA and Canada by 7 and 5 units respectively. So this week we may see another positive EIA report, which will have a positive impact on oil quotes. Second of all, last week OPEC and Russia stated that they are ready to continue joint activities aimed at stabilizing world oil market after the 2014-2015 crisis. Trading signals: Buy 57,50/56,91 and take profit 58,83.
Earnings season in USA continues. ISM indexes showed strong quarterly data, which indicates increase in corporate profit. It's worth to mention that ISM turned out to be right. Earning reports are very positive. Last week such giants of the market as IBM, Goldman Sachs, Morgan Stanley, Johnson & Johnson reported net profit growth. This week will see many quarterly earning reports: 3M, Visa, Amazon, Alphabet, Caterpillar and Coca-Cola are to release their financial results. We are likely to see positive data again, which will support S&P500. These instruments are available in МТ4 platform and every trader can buy any of them. CFTC confirms uptrend: over the last week large speculators ramped up long positions by 21.4 thousand contracts. Trading signals: Buy 2570/2555 and take profit 2590.